The Chain Gang
January 31, 2005-- Home Textiles Today,
A colleague e-mailed a Forbes.com item last week that attributed retail merger mania to that fact that “the industry simply has too many stores and too few shoppers.”
It's a familiar song to anyone involved in retail. But what I found particularly interesting were the responses that came from fellow editors at our publishing company who cover other areas of the business. Here are two:
From the editor of JCK, a monthly for the jewelry trade: “My observation for jewelry is that the mass merchants and department stores are so driven by spreadsheets that they're afraid to take chances on any new product that isn't already a proven seller, so all their merchandise ends up looking the same and there are no 'must have' items.
“Independent stores, meanwhile, are better able to try new ideas and respond to their customers faster. And the Internet is beginning to have a much stronger impact on our business as younger consumers who are comfortable buying expensive goods online are now of jewelry-buying age.”
From the editor of Twice, a bi-weekly for the consumer electronics industry: “In the consumer press everyone was saying that electronics was the hot category at retail for the holidays. Yet Circuit City's sales were down in December, Best Buy's sales were up (but didn't meet projections), Wal-Mart had a bad start to the season on Black Friday weekend, and Ultimate Electronics, a good regional chain based in Colorado, filed for Chapter 11. Profits were also off for the big CE manufacturers because of greater than normal price promotions.
“There are too many locations owned by national chains, at least in our business. Yet the one- to four-location family-owned electronics/appliance stores still do well. Go figure.”
There were two notes arising out the chorus of observations that ought to ring true to home textiles listeners: 1) the blanding effect of merchandising strategies focused on numbers rather than merchandise; and 2) the related inability of large chains to embrace the unique.
Now that quotas are gone and a platoon of factories that never had access to this market will rush forward to make their mark, the obsessive focus on price threatens to swamp all other considerations.
It's important for everybody to remember that at the end of the day, the consumer selects merchandise because of the feature/benefits aspect of the equation — whatever price point range she demographically occupies.
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